Customer service is full of challenges, especially when dealing with unhappy customers. Even your best customer sometimes changes her mind, buys the wrong item, or gives a gift that isn’t quite right. In the crafting world, customers have even more reasons to make returns. Matching colors is tricky, and crafters often buy more of a product than they think they’ll need, figuring they’ll return any extra when the project is done. All the more reason for a craft retailer to establish a clear and fair returns policy, addressing key issues like which products are returnable (and which are not), how long a customer has to make a return, and how the purchase price will be refunded.
Establish Your Policy from the Start
Before you open your doors or your website goes live, you should have already decided on your business’s return and exchange policy. Setting up a policy in advance makes it easier to respond when a customer has a problem and ensures that returns and exchanges are handled consistently from day one. Make sure that all employees are familiar with the policy and can accurately explain it to a customer.
Communicate Policy Clearly
Of course, a return policy is no good if customers don’t know about it. Some craft shops print their return policy on the receipt or staple a copy of the return policy to the receipt so there are no misunderstandings. For on-line customers, it’s a good idea to spell out the policy on the packing slip as well as in a prominent place on the website.
As the Federal Trade Commission advises, “Spell out your policies clearly. A mention on a website won’t help the brick-and-mortar shopper. A fine-print label, an obscure hyperlink, or a small sign posted in an out-of-the-way place aren’t likely to do the trick either.” Check your state for any consumer protection laws that may govern the posting of your policy. For example, New York requires a retailer to “conspicuously” post a sign stating their return policy; if not, then the consumer automatically has a 30-day window in which to return merchandise.
Categorize Potential Returns and Exchanges
Most retailers treat different types of returns differently, depending on the reason for the return. The majority of retailers have a fairly liberal policy for returning defective items: a knitting needle with a bad join, a tool that’s broken, misprinted fabric, and so on. Exchanging or refunding a customer for defective items is a no-brainer since most suppliers will replace defective items with no questions asked. That makes it easy for the shop owner to satisfy the customer without losing any money.
When it comes to non-defective items, most retailers set up different rules for different types of merchandise. Nearly all exclude sale and discontinued items from their open-returns policy, viewing the finality of the sale as a trade-off for the lower price. Many craft shops exclude books and patterns from returns since the temptation for bad apples to photocopy then return the book or pattern is simply too great.
Think about whether there are any other specific items that justify exclusion from your general policy. For example, many yarn shops prohibit returns for knitting needles and crochet hooks since dishonest customers may simply keep exchanging needles or hooks for the size that goes with each new project. Holiday-themed items may also be treated differently since the odds of reselling an item at its original price once the holiday passes are slim.
No matter what’s included and excluded from your return policy, you’ll want to specify that the returned item be in its original condition – fabric that’s uncut, yarn that hasn’t been rewound, and so on. Many retailers also require that the item be returned in or with the original packaging, including labels. Inspect returned items carefully for signs of use or damage before you accept them.
The Not-So-Fine Print
In today’s fast-moving world, most shops – whether craft-related or not – set a window of time for returns: from as little as a few days to as much as a year. When setting a time limit for returns, consider issues that are specific to the crafting world. If you are willing to let a customer return unused skeins of yarn, requiring returns within 10 days may be unrealistic given the time it takes most knitters or crocheters to complete a project.
One yarn shop decided upon a 90-day return window, reasoning that most knitters or crocheters would have at least 1/3 of a project completed within that time, and could estimate the yardage they’d need to complete the item. If you allow too long for returns, however, you may get stuck with out-of-season merchandise, discontinued lots or colorways, or orphaned items in your inventory. Trends may also play a role; hedgehog fabric may be flying off the bolt this year, but next year’s hot animal may be a moose.
Don’t forget to consider the logistics of returns. You’ll need to decide whether to require an original receipt for the purchase; whether to refund the purchase price in cash or by refunding the money to a credit card; whether a check tendered for the purchase price has cleared before a refund can be processed; and when you’ll only give the shopper store credit. If you give store credit, make sure you clearly state whether and when the credit will expire.
When the topic of returns comes up, shop owners always seem to have some war stories; those occasional patrons who seem to abuse the owner’s generosity. When I worked part-time in a knitting shop, I helped a customer who would purchase single skeins of a yarn in different colors, and return them within a few days. One day, the returned ball of yarn seemed awfully hollow in the center. We weighed it and found it was significantly underweight. Turns out the customer was working on a multi-colored project and “purchased” the first color, worked the necessary few rows in that color, and then exchanged the used skein for the next color, over and over again!
It’s impossible to prevent dishonest people from taking advantage of a retailer, which is why having a standard policy in place is so important. Requiring that a receipt accompany all returns prevents grifters from buying supplies on sale at one shop (or shoplifting them), then returning them for a full-price refund at another shop. Requiring that items be returned with the original packaging ensures that the shop owner can repackage the items and sell them to another customer. Remember: having a store policy about returns doesn’t mean you can’t bend the rules from time to time for a long-time customer or unusual situation.
Check for State and Local Regulations
In the United States, there are few federal restrictions that govern refunds and returns. While the Federal Trade Commission provides some limited protections to consumers, these protections tend to focus on issues like unfair advertising or deceptive business practices rather than the nitty-gritty of return policies.
Individual states, however, have been much more aggressive when it comes to enacting consumer-protection regulations. Some common subjects of state regulations:
- Some states require a store’s return policy to be displayed clearly and prominently in writing in order to be enforced. Minnesota, for example, requires that the policy appear in boldface type in a font that is at least 14-point.
- If a store doesn’t post a refund policy, some states may require the shop to honor a specified policy. In New York, for example, if the store doesn’t post a return policy, the customer has the right to return an item within 30 days of purchase.
- California allows retailers to require a restocking fee for some returns, but only if the requirement is prominently posted on the order form or in the store.
Check your state’s consumer practices or business regulatory laws or consult with an attorney licensed in the appropriate state to find out best practices where your shop is located.
Establishing a clear return and exchange policy when you first start your business will help reduce problems and confusion with the inevitable returns. If you already have an established business, be sure your return and exchange policy is working well and up-to-date. Having a policy in place before you need it will be well worth the effort.
This article is presented for educational purposes and does not constitute legal advice or create an attorney-client relationship. It’s always best to consult a licensed attorney in the appropriate jurisdiction to answer your legal questions. The statements made in this article are my own and are not those of my employer.
Carol is a former attorney who left the practice of law when her oldest child was born. She learned to knit as a child, and returned to the craft as an adult. Today she juggles several roles in the knitting industry as designer, writer, handdyer and teacher. Carol lives outside Philadelphia with her husband, their three children and a pet bunny rabbit, Charcoal.